USD/MXN licks its wounds at the lowest levels since December 2015, making rounds to 16.85 during early Asian session on Friday.

That said, the Mexican Peso (MXN) pair dropped in the last five consecutive days amid broad based US Dollar weakness, mainly driven by the concerns that the downbeat US inflation lcues will prod the US Federal Reserve (Fed) from lifting interest rates past July. Adding strength to the USD/MXN bearish bias are the downbeat options market signals.

That said, the one-month Risk Reversal (RR) of the USD/MXN pair, a measure of the spread between call and put prices, dropped the most in six days to -0.240 by the end of Thursday’s North American trading session.

In doing so, the options market figures defy the hopes of witnessing a corrective bounce in the USD/MXN price. It should be noted that the options market gauge prints the biggest weekly RR slump since early June with -0.327 mark at the latest.

Elsewhere, the US Dollar Index (DXY) remains on the back foot at lowest levels since since April 2022 ahead of the preliminary readings of July’s Michigan Consumer Sentiment Index, as well as the five-year Consumer Inflation Expectations.

Also read: Forex Today: Dollar’s downward spiral continues

Source link